If interest rates rise, this will _________ the cost of buying new homes, so ________ new homes will be purchased thereby reducing ___________ expenditures.

Question

Quizplus · Accepted Answer

If interest rates rise, it will increase the cost of borrowing for mortgages, which will reduce the demand for new homes as fewer people will be willing or able to purchase them. This will result in reduced investment expenditures, as the construction and sale of new homes is a form of investment. Therefore, option C is the correct answer as it correctly describes the relationship between rising interest rates, home purchases, and investment expenditures.

If Interest Rates Rise, This Will _________ the Cost of Buying